Business Finance - Management QSO 349 Homework ( week 7)

Southern New Hampshire University

QSO-349 Contracting/Procurement

Mohammad Alshaghathirah

Outline

Procurement regulations are necessary to ensure fairness, transparency, and

accountability in the procurement process. Procurement regulations are the type of enforcements

which are needed by mostly every government which includes local, Federal and regional as

well. It is needed for specific types of procurements. For example, the city of Manchester, NH,

has its own procurement regulations that are different from the state of New Hampshire and the

federal government.

Section 3

In the United States, government procurement is subject to various regulations at the

local, regional, and federal levels. For example, the Federal Acquisition Regulation (FAR)

outlines the procurement policies and procedures for all federal agencies, including those related

to contract formation, source selection, and contract administration. Other federal regulations

may also apply depending on the type of procurement, such as the Buy American Act, which

requires that certain products used in federal procurement be made in the United States. In the

case of Germany, procurement regulations are established at the federal level by the Federal

Ministry of Economics and Energy (BMWi) and are implemented through the Federal

Procurement Office (Beschaffungsamt des Bundesministeriums des Innern). The regulations also

require that contracts be awarded based on the most advantageous offer, taking into account

price, quality, and other relevant factors.

In Germany, procurement regulations are enforced at the federal, state, and local levels.

The Federal Procurement Office (Bundeskartellamt) oversees the enforcement of procurement

laws at the federal level. The Office enforces procurement regulations for contracts with a value

above a certain threshold, which is set by the European Union. The thresholds vary depending on

the type of procurement, and range from €139,000 for supplies and services contracts to €5.3

million for works contracts. At the state level, procurement regulations are enforced by the

individual state governments. These regulations are based on the federal procurement laws but

may differ slightly in terms of threshold values and other requirements. In comparison to the

United States, procurement regulations in Germany are more centralized and standardized. The

federal government has a larger role in enforcing procurement laws, and there is less variation

between the regulations enforced at the federal, state, and local levels. For the selected

procurement scenario in the case study, the regulations that would apply would depend on the

location of the project and the value of the contract. If the project is in Germany and the contract

value is above the EU threshold, then the procurement regulations enforced by the Federal

Procurement Office would apply. If the contract value is below the threshold, then the

procurement regulations enforced by the local government would apply. It is important to note

that the regulations may differ depending on the specific region in Germany where the project is

located.

Some key differences are discussed here which provides the difference between domestic

and international ones. Procurement regulations are mostly and primarily governed in the United

States by the Federal Acquisition Regulation (FAR) for federal government contracts.

Additionally, each state and local government has its own procurement regulations that must be

followed for contracts with state and local governments. In contrast, Germany has a centralized

procurement system for public contracts that is governed by the Federal Procurement Act (VgV).

there are differences in the types of procurement methods allowed. In the United States, contracts

can be awarded through competitive sealed bidding, competitive proposals, sole source awards,

or simplified acquisition procedures, depending on the circumstances of the procurement. In

Germany, contracts are typically awarded through open, restricted, or negotiated procedures,

with different criteria for when each type of procedure is appropriate.

In the United States, State and local governments may also have their own regulations in

addition to the federal regulations. Federal Acquisition Regulation (FAR) and Defense Federal

Acquisition Regulation Supplement are available for Federal Government. In Germany,

procurement regulations are primarily governed by the Federal Procurement Act (VgV) and the

Contracting Authorities Directive (VOL/A). These regulations apply to all public procurement in

Germany, including the construction of public facilities. Since the project in the case study

involves a US-based company constructing a facility in Germany, both the US-based company

and the German government would need to comply with the procurement regulations in both

countries. The US-based company would need to comply with the regulations set forth by the

German government for public procurement, while also adhering to the regulations set forth by

the US government for companies operating in the construction industry.

Section 4

Common source selection criteria used to evaluate vendor proposals typically include factors

such as cost, technical capability, past performance, and management approach. In the case study

we have been discussing, which involves the procurement of new software for a city's police

department, some additional factors that may be considered in the source selection process

include:

● Compatibility

● Security

● Ease of use

● Support and maintenance

● Scalability

These factors could be used to develop a vendor evaluation tool to assess the proposals

submitted by potential vendors. The tool could assign a score to each factor based on its relative

importance, and vendors could be evaluated based on their performance across all criteria. This

would provide a more objective and standardized way of evaluating proposals and selecting a

vendor for the project.

We need to consider the specific requirements and constraints of the project to select the

vendor evaluation tool. Based on the case study, we can identify the following parameters that

would be useful for evaluating vendor proposals:

● Cost

● Quality

● Delivery Time

● Compliance with Regulations

● Vendor Experience and Reputation

Based on these parameters, our best option could be a weighted scoring system. This

system would assign weights to each parameter based on its relative importance to the project,

and then score each vendor proposal on each parameter. The scores for each parameter would be

multiplied by their respective weights, and then summed to produce a summary evaluation score.

To assess the effectiveness of the vendor evaluation tool produced for the case study, we

need to evaluate how well it satisfies the project requirements and provides maximum value to

the buyer. In terms of satisfying the project requirements, the vendor evaluation tool includes

appropriate selection criteria that are aligned with the procurement plan and the needs of the

buyer. The tool considers various factors such as price, quality, past performance, and delivery

time, which are essential in evaluating vendor proposals. Additionally, the tool uses a weighting

system that assigns different values to each selection criterion, based on their relative

importance, allowing for a more accurate evaluation of vendor proposals. Furthermore, the tool

is designed to produce a summary evaluation score that simplifies the decision-making process

for the buyer. This score is calculated based on the weighted criteria and provides a clear

indication of which vendor proposal is the most suitable for the procurement plan.

References

Flynn, J., & Flynn, P. (2018). Introduction to Public Procurement. Routledge.

United States General Services Administration. (n.d.). Procurement regulations. Retrieved March 12, 2023, from https://www.gsa.gov/policy-regulations/regulations/procurement-regulations

European Commission. (2020). Public procurement rules. Retrieved March 12, 2023, from https://ec.europa.eu/growth/single-market/public-procurement/rules_en

Arrowsmith, S., & Trybus, M. (2011). Public procurement: Global revolution. The Netherlands: Kluwer Law International.

Kraljic, P. (1983). Purchasing must become supply management. Harvard Business Review, 61(5), 109-117.